Sleep disorders represent a growing global health concern with significant socio-economic impacts. GABA, a natural bioactive compound abundant in various fermented foods, especially probiotic-fermented foods, has garnered increasing attention for its potential to improve sleep quality. This review systematically elucidates the multi-pathway mechanisms by which GABA regulates sleep, focusing on (1) indirect modulation of central sleep–wake circuits via the gut–brain axis through vagal nerve, neuroendocrine, and immune pathways; (2) potential entry into the brain by leveraging the dynamic permeability of the blood–brain barrier (BBB) and transporter-mediated active transport; and (3) metabolic conversion into active substances like γ-hydroxybutyrate (GHB), which synergistically optimizes sleep architecture via multiple receptor systems and energy metabolism. Furthermore, we summarize the sleep-promoting effects of GABA-enriched foods observed in animal and clinical studies and discuss emerging applications, including high-GABA-yielding probiotics and personalized nutrition strategies for sleep intervention. This review provides a theoretical basis and innovative directions for the development of GABA-based functional foods and sleep health management.